Charoen’s Frasers Hospitality Advances in Debut: Singapore Mover

Frasers Hospitality Trust, backed by Thailand’s richest man, rose on its first day of trading in Singapore as its higher yield attracted investors.

The units were 1.7 percent higher at 89.5 Singapore cents at the close in the city-state, compared with the offer price of 88 Singapore cents. The trust, which is backed by six hotels and six serviced residences, sold 185.06 million units, it said in a regulatory filing on June 30. Frasers Hospitality issued 418 million securities to raise S$368 million ($297 million) including funds from cornerstone investors, it said in a statement July 11.

Frasers Hospitality Trust plans to offer a dividend yield of 7 percent for the 2015 financial year, higher than Ascott Residence Trust’s 12-month yield of 6.2 percent and Far East Hospitality Trust’s 6.4 percent. The initial portfolio of 12 properties is spread across seven key gateway cities in Asia, Australia and the U.K., with a total of 1,928 hotel rooms and 842 serviced residence units, according to the firm.

“There is good interest for this offering as it has a global portfolio and the economies are picking up,” said Goh Han Peng, a Singapore-based analyst at DMG & Partners Securities Pte. “The yield is also slightly above its peers.”

The trust will include assets from Thai billionaire Charoen Sirivadhanabhakdi’s closely held TCC Land Co. as well as Frasers Centrepoint Ltd., which was spun off from Fraser & Neave Ltd. in January. Charoen won control of Fraser & Neave last year in a battle with Singapore’s OUE Ltd.

Charoen has a net worth of $11.8 billion, according to the Bloomberg Billionaires Index.

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